Serious issue : daytrader-swingtrader inner conflict

I think Ill never be a good trader cos I cant stick to my rules! There, Ive said it...
Each night I dnload daily data for 100 "Nasdaq 100" stocks, plus some 40ish NASDAQ stocks I have separately and so I scroll through them looking for 3 dn or up days.

OK, after finding like 10 or 20 of those I try to pick out up to 4 skies and 4 fishers (for both situations in the market - should we go down, SKY, should we go up - FISHER). Put em on my QQL screens (daily and below 15 min chart for each of them).

AND I also have a separate screen with QQQ daily, 15 min and 2.5min chart, Time and Sales plus 15 min NASDAQ and DOW charts.

So wheres the problem? Well the problem seems to be that I find my setup plays, watch them in the morning (as you know most of the action happens there - I MISS IT AS iM AFFRAID TO PLAY IT) and then the setups are no longer valid . R/R ratio drops dramatically and since I only have 8 stocks its highly likely that ill miss them all.

So I go to the QQQ screen and my subconsious kicks in and tells me :"You stupid moron, DAYTRADE this! Pick up a hundred shares, its related to overall market action so you can incorporate any major news into prediction and it only takes like 20-40 cents to make 20-40 Bucks - enough for my goals-. Do this 3 times a week and quit for the rest."

I guess this is because I've wanted to be a daytrader since...like, ever. SO its darn hard to make the switch. Besides Tonys screener and setups are meant to be used in realtime right? So you can calculate your R/R, stops etc. on the spot. I cannot know if we will gap tomorrow when doing it with EOD data.

Two Trading Mantras that I read daily when I get into this kind of funk.

Hope they help.

Chris

- Confidence.

I don't know what the market does next. I don't have to know it. I know how I will react on anything the market does. I am confident in my ability to react right. I have a strategy that works and the discipline to carry it out. I am independent minded. I don't trade to please others. I am self - reliant. I question any trade I take but I don't question my ability to make the right decisions. I trade effortlessly and automatically. I manage risk and assume losses. I trust myself.

- Emotionlessness.

I am objective and calm. I am a detached observer. I don't get angry with stocks doing not what I expected - I know they do what they do, the market is what it is. I don't get frustrated with stop losses - they are part of the game. I don't get overexcited with winning trades, they are just one more confirmation of my right approach. I feel good about myself and my trading. My performance as a trader doesn't reflect on my self-worth.

If you had a large enought account it might be a serious conflict because you could do either. But you don't, so it would probably be best to focus ALL your energies on swingtrading, build up your account, and when you reach the point where you can daytrade...you may prefer swingtrading (heh heh). Seriously, at that point you can make the choice and, at the very least, you will have some well developed swingtrading techniques that will always serve you well.

It's obvious capital is a problem. Can you take a loan out Neo? My opinion is it's better to take out a loan at 10 percent instead of playing with too little capital which almost guarantees a loss. And if you're still too nervous...paper trade! Build up a solid record and then you'll be much more confident.

It helps psychologically to have a strategy that you know works at least on paper. If you have no confidence in a system (like Tony's because you haven't proven to yourself it works), it will be hard to pull the trigger, and hard to exit properly when you do enter. I wouldn't trade a dime until you have a successful strategy that you know works for say the past month or two.

Example: Take Tony's Bottom Fisher System.

Rule 1: Place a Buy Stop a few cents above previous days high for entry. [key resistance point for many traders]

Rule 2: On entry, place Sell Stop just below the Open for the current day.

Then take a system similar to above and back test it for 20-40 trades by hand, and get some stats on its profitability. Document all the info in a journal and then compare to future systems you develop. Armed with a good system, you will have much more confidence than what hope alone gives you.

P.S. You don't want to daytrade yet anyway. It's much more stressful than swingtrading, and tougher to make money at IMO. If you master longer term trading it's a good background for shorter term trading later on.

I don't have definitive figures to back this up but I guess the
survival rate is higher for swing traders than for daytraders... since swingtrading places less of a premium on speed / timing and more on trade management, I wouldn't be surprised if my guess is correct.

"It's obvious capital is a problem. Can you take a loan out Neo? My opinion is it's better to take out a loan at 10 percent instead of playing with too little capital which almost guarantees a loss. And if you're still too nervous...paper trade! Build up a solid record and then you'll be much more confident."

liltrtrd : Sorry, it's usually not my thing to argue so blatantly, but in this case, I must :
The first part of your advice is the most stupied I've ever read or heard, especially for a newbie who can barely afford to loose his own 4K of trading capital, let alone any borrowed capital.

Why do you think Neo has problems with pulling the trigger ?
All his TA blala about the best tradingstyle and this and that pattern is imho just an excuse for not admitting, that he's scared to loose the few bucks he has due to a bad tradingdecision.

Read how Neo managed his first trade and he and you know what I'm talking about.

I feel very sorry for him, that he doesn't get it - with 4K, he has no choice other than adapting some kind of investmentstyle- trading or trying to catch the larger market moves in order to grow his account to a size where he can afford some losses - which will inevitably happen - even with the best system.
We all know, that loosing is part of the game and losses are part of the expenses we've to pay as traders.
But with only 4K, you can't probably afford to pay the learning lessons. In Neo's country, Croatia, 4K USD is what many people earn in a year.

If I'd loose 4K in trading, it would be bad, butI wouldn't have to change my livestyle nor wood I have to stop trading - but if 4K is all you have .....? OK - it helps to be disciplined, but it also scares you to death if you loose only 10% of it.

IMHO :
Unless you are a 2nd. Tony Oz and unless we have a market like in the late 90ties, either shortterm-swing or daytrading is a loosing proposition with 4K of scared money - don't ya think so ?

Neo , don't take it personal, but just consider yourself not as a daytrader as long as you don't have the capital to do it. Just forget those blinking L2 quotes and all that stuff for a while and regroup your thinking.

We all have our dreams and , one day, they may come true - but for now, as a trader, you need to live in reality - not in dreamworlds. You cannot trade dreams and you cannot live from them.

Think for a moment about what kind of an edge one can have with only 4Kof trading capital in this market.

My advice is, invest them very very wisely in well selected stocks
(and not necessarily all of the money in stocks ) and wait until you have enough money to play the daytrading game. In the meantime, study the markets, do some papertrading if you like ( although I don't think that's nearly a help ).

- otherwise, you'll belong to the countless other ex-players in this market who got washed out after loosing all of their few bucks in the fruitless effort to compete with the pro's and big money in shortterm trading.